Lawyer Needed To Evaluate Bad Faith Claims

Weatherford bad faith attorneys need to know about this recent court opinion from the Corpus Christi Court of Appeals. The style of the case is Ruth McGhan v. Farmers Insurance Exchange. Here are some facts.
This is an appeal from a summary judgment granted in favor of Farmers Insurance Exchange, and against Ruth McGhan in a case involving damages to her lake house. By one issue, McGhan claims that the trial court erred in granting summary judgment because Farmers failed to conduct a reasonable investigation of her claim as “no representative from Farmers inspected the damage to McGhan’s 3,500 square foot roof,” which gave rise to McGhan’s statutory, common law and breach of contract claims.
McGhan originally filed suit against Charles Archer, Diana Kees, Archer Development Group, and Bill and Alice Clayton with respect to repairs that allegedly needed to be made to her home. Farmers had not yet been sued, but the pleadings alleged that coverage had been denied. Farmers was not named as a defendant until McGhan’s third amended petition in which she asserted that Farmers denied her claims because the claims were not covered losses. The lawsuit asserted claims of breach of contract, bad faith, deceptive trade practices, and negligence. In McGhan’s fourth amended petition, filed after the summary judgment was heard, McGhan alleged for the first time that no representative of Farmers adequately inspected the roof when she made her claims in 2007. Her causes of action against Farmers remained the same as alleged in the third amended petition.
Farmers moved for summary judgment. As summary judgment evidence, Farmers attached the policy of insurance and amendatory endorsement, the oral deposition of McGhan, denial letters issued by Farmers, a letter issuing payment to McGhan for roof damage in 2008, post-Hurricane Ike, the affidavit of Carlos Rodriguez of CHR Roofing, and a property inspection report prepared by Jerald Brown.
Farmers asserted that there was no evidence that Farmers breached its contract with McGhan and no evidence of damages. With respect to McGhan’s bad faith claim, Farmers argued that there was no evidence that Farmers acted in bad faith or breached the duty of good faith and fair dealing. Farmers alleged that there was no evidence that it engaged in any of the alleged violations of the deceptive trade practices act or that it was the producing cause of any of the alleged damages. With respect to McGhan’s negligence cause of action, Farmers argued that it owed her no duty, did not breach any duty and caused no damages.
The facts are that Farmers denied claims of damage based on claims made in July and August of 2007. A July 9, 2007 denial letter said that their investigation revealed that the roof showed signs of wear and tear in the form of flashing failure and the water damage was a result of a slow intermittent leak, but no storm damage was found. The policy provided that loss covered by rain, whether or not driven by wind was excluded from coverage unless the direct force of wind or hail made an opening in the roof or wall and water entered through the opening causing damage.
The denial letter based upon the August claim stated that the investigation showed signs of wear and tear in the form of flashing failures, but no storm damage was found. The letter noted that flashing failures were specifically excluded under the policy. The letter also noted that there were no storm related openings found in the roof or the walls.
Farmers argues that McGhan cannot recover under any of her claims because the only evidence she submitted in response to the no-evidence motion was her own affidavit and deposition and neither raises a fact issue. The court agreed with Farmers.
In response, McGhan submitted her own deposition testimony wherein she stated that she was not a construction expert and she had no expertise in insurance claims. She testified that she did not know if there was storm related damage to the roof because she did not get on the roof. She said that someone named Jason Anderson, a metal roof expert, told her that there was storm related damage. Anderson told her that there was significant damage to the roof in various places and “that it could definitely be responsible for the–leaks we were finding.” She further testified that someone named Patrick from Farmers came out to her home, looked at the roof and told her that he did not find any storm created damage that was causing the leak. She said that he did not get on the roof during his inspection. She was not sure why Jason Anderson thought there might be coverage.
Farmers objected to McGhan’s summary judgment evidence, stating that Jason Anderson had not been properly or timely designated as a witness and any of her statements with respect to what he said would also be hearsay. Without question, Anderson was not designated nor did his testimony, either by affidavit or deposition, appear in the record. In order to be admissible into evidence, an expert witness’s testimony must be reliable. Here, McGhan’s testimony, with respect to what Anderson might have said is not only hearsay, it is without probative force because there is no indication that he was actually an expert or that any testimony he would have given would have been reliable. Because McGhan submitted no probative evidence to support her claims in response to Farmers’ no-evidence motion for summary judgment, the court held that the trial court properly granted the no-evidence motion for summary judgment.
This appears to be a case where an attorney experienced in bad faith claims needed to be involved early